Yelp to sell Eat24 to Grubhub for $287.5M

Yelp said it would enter a long-term strategic partnership in which it would integrate online ordering from restaurants on Grubhub's site.Reuters | August 04, 2017, 10:56 IST

Yelp said on Thursday it would sell its Eat24 business to Grubhub for $287.5 million in cash, along with reporting a better-than-expected quarterly revenue that drove its shares up more than 18%.

The consumer review website operator also said its board had authorized a $200 million share repurchase program.

Shares of Grubhub, meanwhile, fell 7% in extended trade. The online food delivery platform reported second-quarter revenue up 32% to $159 million, slightly above the $158 million expected on average by analysts, according to Thomson Reuters data.

Yelp said it would enter a long-term strategic partnership in which it would integrate online ordering from restaurants on Grubhub's site.

Yelp's second-quarter revenue rose 20% to $209 million, above the $205 million expected by analysts, on average. Net income of $7.6 million far exceeded $400,000 a year earlier. Looking to the third quarter, Yelp said it expects revenue of $217 to $222 million. Analysts have been expecting $219.67 million.

Investors were cheered by the beat in revenue after Yelp missed first-quarter revenue estimates, along with news of the sale and the repurchase program.

"It's a sign that execution is back on track," analyst Matthew Thornton of Suntrust Robinson Humphrey Capital Markets said.